Credit Growth Picks Up: Private Sector Lending Rises to 10.6 Per Cent

The acceleration means more money is flowing to businesses and households from banks. For a shop owner or manufacturer, stronger credit growth can mean easier access to working capital or expansion loans, even if rates remain elevated.

Average commercial banks’ lending rates stood at 14.4 per cent in September 2026, compared with 14.3 per cent in August and 17.2 per cent in November 2024. The modest rise in the average rate coincides with the continued growth in lending volumes.

Growth in credit to key sectors remained strong, particularly trade, building and construction, agriculture, finance and insurance, and consumer durables. The Committee noted improved demand for credit as one factor supporting the expansion.

Lending expands while rates stay elevated

A year earlier, private sector credit had been contracting. The shift to 10.6 per cent growth marks a clear recovery in bank lending. How interest-rate policy reaches the real economy depends on banks passing on changes in the Central Bank Rate, which the MPC held at 8.75 per cent at its 7 October meeting.

Businesses in trade and construction that report stronger credit uptake can hire, stock inventory or start projects. Households taking consumer loans face the same 14.4 per cent average rate when they borrow.

What the MPC sees ahead

The Committee judged the current stance appropriate to keep inflation within target and support exchange-rate stability. Overall inflation stood at 6.8 per cent in September. The next MPC meeting is scheduled for December 2026.

Readers watching borrowing costs will look for whether average lending rates ease further if the Central Bank Rate remains unchanged and credit demand stays firm.